By IFCMarkets

US dollar index edged lower while the US stocks advanced on Friday. The stock market rally was triggered by news on contracted wholesale inverntories. Energy stocks rose in price together with oil prices. US dollar weakened to itslowest in 17 months against the Japanese yen. As a result, it weakened also against other major currencies. Such movements of US currency were caused by the Fed Presidents policymakers comments that no rush in interest rates hike is needed. Market participants do not expect the rates to be changed at the next US regulator meeting on April 27. Now the Fed funds futures prices indicate the 54.6% chances for the interest rate hike by 0.25 percentage points and the 45.4% chances for the rate hike by 0.5% percentage points in 2016. No policy meetings are expected in May while they are scheduled on April 27 and June 15. Today no significant economic events are expected in US except for the two Fed Presidents speeches.

European stock indices are on the rise today for the 2nd straight day thanks to the positive dynamics of the US stock market. Unlike yen and other currencies, euro is almost flat against the US dollar. ECB is planning to place 54-60bn euros in private banks in order to give them financial support. ECB President Mario Draghi stated on Friday the further moneraty easing is probable if neede to stimulate the European economy. After that the yields on German 10-year state bonds hit a fresh year low at 0.08%. No significant economic news are expected today in EU.

Nikkei index slightly edged lower on Monday after its increase on Friday. This happened amid continued yen strengthening which makes Japanese exporters less competitive. Automakers Toyota Motor, Honda Motor and Nissan Motor stocks lost 3-3.5%. Investors shrugged off quite positive economic data. The factory orders fell in Japan in February mich less than expected. Yen continues strengthening for the 7th straight day which is the longest strengthenng period since September 2012. Many international organizations and major banks such as Organisation for Economic Co-operation and Development and Deutsche Bank stated that yen strengthening has fundamental factors and may continue for another 2%. Amid this the net longs in yen reached the record high in US exchanges since 1992, according to the US Commodity Futures Trading Commission. Tomorrow in the morning the Japan’s machine tools orders and machinery orders will be released. The Bank of Japan policymaker Yutaka Harada will speak on economy.

Commodities futures advanced on strong data from China where the February producer price index (MoM) edged up in February for the first time since September 2013. Moreover, the March volume of loans rose in yuans. The China’s Shanghai Composite stock market index jumped 1.7% on such positive news.

Wheat has renewed its 5-week low on rainy weather in US. The soy edged up to the 8-month high amid reduced planting acreage in US. The AgResource agency expects the wheat and corn prices to reach the 10-year low in case the record crops forecasts prove true. On Tuesday at 18:00 CET USDA will release the monthly global soy, wheat and corn stocks outlook at 15/16 season end which may affect the markets. Compared to the March report, market participants expect the global corn and soy stocks to increase while the wheat stockpiles to contract.

Oil prices stopped growing today after the Goldman Sachs investment bank expressed its opinion today that OPEC and independent oil producers are unlikely to reach an agreement on production “freeze” on their meeting on April 17. Meanwhile, Bernstein agency anticipates the globaloil prices to edge up to $60 a barrel to the end of 2016. It forecasts the global demand for oil to reach 101.1mln barrels a day in 2020. Now the global oil demand is estimated at scarce 94.6mln barrels. Thus, the agency expects the demand to rise by 6.5mln barrels a day soon.

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